What Should We Think about the Stimulus Package?
My sister was laid off in the fall and her husband, a long-time foreman in the construction industry, had to apply recently for unemployment. Fortunately, she is on the cusp of landing a new job, but for almost half what she was making…if she's hired. I suppose that readers of this column have also been adversely touched by the shrinking economy, either directly or indirectly through friends and family. Yet, I am torn, turning away from those in other places where the people outside our borders—Iraq, Afghanistan, the Israeli-Palestinian conflict, etc.—are suffering more, and in more ways, than most Americans. May our prayers include cross-border intercessory thoughts.
In the meantime, what should we make of this gargantuan stimulus package? I frankly don't know. I'm not an economist and I have few tools by which to evaluate an expert response to it. But I think it is important to focus our attention on some of the nuts and bolts and arguments to help us more intelligently pray, discuss, and perhaps try to persuade members of Congress one way or the other.
The House version costs $819 billion. The Senate has begun debate over President Obama's original proposal. It is likely the Senate and House bills will differ. In that case a conference committee will reconcile the two bills and send the unified package back to both chambers to vote on. If it passes—and some version of the bill will likely pass—it will go to Obama's desk for his signature. Proponents hope this process goes quickly, while opponents hope it dies or is modified down in cost and/or number and kind of line items. Either way we have time to weigh in with our congresspersons.
Most of the House version (http://www.washingtonpost.com/wp-dyn/content/graphic/2009/02/01/GR2009020100154.html?sid=ST2009020100161&s_pos=listxpanded health care coverage) consists of tax breaks (for those below the top 5 percent of income earners) and aid to laid-off workers in unemployment payments and expansion of healthcare coverage, as well as helping states to fund education and school infrastructure. Together these two expenditures alone make up over two-thirds of the cost of the bill. But there are lots of other line items. (http://www.washingtonpost.com/wp-dyn/content/graphic/2009/02/01/GR2009020100154.html?sid=ST2009020100161&s_pos=listxpanded health care coverage)
Not a single House Republican supported the package, which raises real concerns. Opponents say it is too expensive (its cost is equivalent to about 5% of the size of the US economy, and it would increase US debt to almost $11 trillion). This alone should make us cautious and inquisitive. Here (http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013101484.html?wprss=rss_business%2Fpersonalfinance) you can find answers to some questions you might have. There are some economists—it seems that they are in the minority—who believe it won't work to stimulate the economy but instead will put off the inevitable pain that goes along with major "adjustments" that market economies naturally experience over time. And if the politically neutral Congressional Budget Office is correct, about a third of the spending can be done in 18 months or less, which some think is too late for the stimulus to make a real difference in things like employment. Finally, many Republicans argue that there is more package and less stimulus than they thought there would be. For instance, less than $100 billion of the package consists of "shovel ready" infrastructure projects.
In fact, there is a lot of funding for education and healthcare policies many Democrats have wanted funded for a long time. A substantial chunk of the benefits of the funding would go to lower income workers who have suffered the most recently, a worthy goal. Obama believes the package will replace or create 3 million jobs. He also believes that the Senate will add measures to increase the amount of funding that would be stimulative sooner. For a strong argument favoring the package, click here. (http://www.americanprogress.org/issues/2009/01/recovery_reinvestment101.html) And though he respectfully held a meeting with leading congressional Republicans—to no avail—before the vote, he insists the final package will be a bipartisan measure, which would be consistent with his campaign promise to work in a bipartisan fashion. Democrats worry about the concessions (http://www.washingtonpost.com/wp-dyn/content/article/2009/02/01/AR2009020102066.html?hpid=topnews) he would have to make, however.
Still, bipartisanship is good politics—and not because it is necessary to stave off a filibuster in the Senate. It is necessary to inoculate our politics from the strident partisanship that has polarized us into embracing the myth of red and blue states. If we are going to solve this huge economic challenge while resurrecting respect frayed across party lines, we will need to heed the spirit of bipartisanship with which Obama has inaugurated his administration.